Wednesday, November 09, 2005

Dalit Cooperative Bank

Advantages of Dalit Co-operative Bank

If a co-operative bank is formed by dalits, which lends to membersonly, there will be no corporate income tax on the interest income ofthe bank.Many cooperative banks never distribute dividends out of theinvestments in the bank. They typically compensate their ownersthrough lending at reduced interest rates. This the reason whycooperative banks are able to lend at lower margins than private banks.If one adds the benefit of "no corporate income tax" over and abovethis benefit, the margins that dalit cooperative banks will be able tooffer loans at will be lowest in the market.
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